tag:blogger.com,1999:blog-4815867514277794362.post5953889465675320509..comments2024-03-08T06:18:28.125+11:00Comments on Bronte Capital: Follow up to the Pershing Square insider trading postJohn Hemptonhttp://www.blogger.com/profile/03766274392122783128noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-4815867514277794362.post-34706410135116800842014-10-02T23:04:20.294+10:002014-10-02T23:04:20.294+10:00If you think this is SEC over-reach, you should ge...If you think this is SEC over-reach, you should get familiar with the FCA's definition of "market abuse" in the UK. They have gone way beyond what was previously understood by insider trading.Alan Richardsnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-41732640943209883682014-10-02T21:35:36.749+10:002014-10-02T21:35:36.749+10:00From a CFA perspective, I think it would at least ...From a CFA perspective, I think it would at least violate the code of ethics. I have no clue if the analyst was a charter holder, but the fact that this case would violate CFA policy might give some clue as to why the SEC is all bent out of shape. <br /><br />You're correct in saying that Pershing was simply publicizing public information. And if Pershing was a no name shop, I don't think the SEC would be involved. However, since Pershing is a household name, and the analyst certainly knew his report would be material if not nonpublic, he had a duty to not trade on it. The same would happen if a major analyst at a bulge-bracket firm downgraded a stock to Sell. There could be no new information whatsoever, but it will be material to the stock and the rating change will be nonpublic. Trading ahead of the event would then be a violation of code. <br /><br />Should the SEC be involved? I'm not sure, the lawyers can battle that one out. But to say that Pershing's analyst didn't know exactly what he was doing is a stretch...John Richardshttps://www.blogger.com/profile/03590081075212934643noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-880573209985280162014-10-02T21:25:34.772+10:002014-10-02T21:25:34.772+10:00quite agree with commenter 2;
this is just to sho...quite agree with commenter 2; <br />this is just to show that they are doing something; regulators and SEC are cosy with the big guys (for whom the amounts in question would be a rounding error) ; they will do nothing to rock that boat which may be their next employerAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-67784262514513433852014-10-02T16:58:51.111+10:002014-10-02T16:58:51.111+10:00Why is this different from, say, an intern on Jim ...Why is this different from, say, an intern on Jim Cramer's tv show who trades based on knowledge of what Cramer is going to say tomorrow?<br /><br />This is not small fish by the way. It sends a pretty loud message to young financiers about how easily the SEC can link unusual trading activity to a source of misappropriated information.<br /><br />-AmosAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-24318083073053523552014-10-01T20:06:38.171+10:002014-10-01T20:06:38.171+10:00those guys are small fish. those scumbags at the S...those guys are small fish. those scumbags at the SEC know they won't have the resources to fight back. they are just doing this to show that 'we are working'. just like they did with the MaverickAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-19598979566056380962014-10-01T17:06:56.676+10:002014-10-01T17:06:56.676+10:00You are likely correct....but I think the SEC is l...You are likely correct....but I think the SEC is looking at it from the point of view by asking the question of whether the "man on the street" had access to the same information. Since the "man" didn't, and the information was highly likely to create an easy windfall (which it did) the SEC don't like it.<br /><br />Similar laws have come into effect with the big bond trading houses not being able to use sell-side bank recommendations as inputs to quantitative models because they get access to it before the "public" does. They have caved and have stopped using the survey info as input to their models.Peternoreply@blogger.com